The Trust-less Economy

Gary Schwartz, author of many technology books including the IMPULSE ECONOMY will give the upcoming keynote at SMART INVESTMENT conference in Curacao. We talk to Gary about the advent of the Blockchain

Gary says, "There are evolutions and revolutions in technology. We always think that we are in a revolution however 99% of innovation is derivative."More

The word SMART is become a technology panacea and a marketing gimmick. Ultimately, intelligent cities and nation states arose from the ability for subsistence-based communities to scale. This was a produce of a data revolution called WRITTEN LANGUAGE.

Think of a person as a computer. Having written language enabled one person to share data with other people and transmit instructions without smoke signals and megaphones. This was the first network architecture with central databases and hub-and-spoke nodes.

Everyone likes to use the work “revolution”. It makes people pay attention. “Now” is always the revolution. But data is the true fuel of any human revolution. Is allows for scale which allows for innovation.

Here are pillars of any data revolution: The data needs to run on an open architecture. It needs to be permission-less (anyone can use it). It is decentralized, interoperable, it is a platform for products & services (and crucially for adoption) it needs to be a commerce enabler.

Written language had all these properties. From 2500 BCE to the Gutenberg Press everything was a derivative. Thing became more efficient. Bibles and laws could be easy drafted and promulgated. But this was evolutionary not revolutionary.

Again: Here are pillars of any data revolution: The data needs to run on an open architecture. It needs to be permission-less (anyone can use it) - it is decentralized, interoperable, it is a platform for products & services and crucially for adoption, it is a commerce enabler.

All other data innovation on top of this language protocol need to be seen as evolutionary. HTML, HTTP, even the so-called revolution of the Internet of Things, is derivative. The revolution happened in 1970s using this box across this network with this message:

Similar to your industrial revolution question. TCP IP allowed computers to talk to computer. This allowed for data to scale. More data allowed for us to mine this big data. AI is called the 4th industrial revolution. But it is all predicated on the Internet data revolution.

Okay - I am going to lead the witness - I know you are going to talk about the BLOCKCHAIN. What make Blockchain technology (or in your words Blockchain “language”) a revolution and not a derivative data channel?

Blockchain is the next data revolution (fast on the heels of the Internet). Edward Snowden and realization that there is an pervasive abuse of data coupled with the 2008 bank debacle, made many folk lose trust in the Internet language protocol.

The Blockchain (and the initial mined crypto-currency, Bitcoin) was a way to not only provide a permission-less language but a TRUST-LESS language. Blockchain takes out the banks and intermediaries brokers. No human handshakes are required.

Again, based on my data revolution tenets: The data needs to run on an open architecture. It needs to be permission-less or in this case TRUSTLESS - it is decentralized, interoperable, it is a platform for products & services and crucially for adoption, it is a commerce enabler.

In the real world we walk into a bank or sign a contract with a person or institution based on reputation and trust. There is a handshake. Post Snowden and the 2008 Crisis, trust needed to have an absolute arbitrator.

By using the blockchain, we are using an algorithm that is build by consensus (thousands of computers globally) there is no bank manager, lawyer or witness counter signing this agreement. It is immutable. These is no need for TRUST in the convention sense.

Crucially, borders will be pulled down as jurisdiction has less meaning in the global blockchain. Maybe this revolution will reduce our dependancy on the nation state and that may be the SMART part of the revolution.